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Saturday, June 14, 2008

When doing economic development projects overseas with the goal of poverty alleviation many people are unaware that seemingly helpful actions can create major long term problems.

Avoid getting in too deep. Always be aware that you need to leave the project and when you do, that project needs to run on its own. Make sure to create a trail of systems, people, and assets that will function without you. If not, the project will fall apart shortly after you leave. Require some level of investment on the part of the beneficiaries. Giving things for free creates a paternalistic culture that is often hard to change and ruins future projects. Additionally, people's willingness to pay for a project signals how useful they view the project. If people are unwilling to pay for even a part of a project, it usually means that they see no benefit in the project. These groupss will not outright reject the project because it is free and therefore doesn't hurt them even if it is carried out. Don't think that co-ops are always the answer. Very often in economic development projects there is a desire to help everybody. However, some business plans just do not work with group ownership. A coffee shop to sell to tourists, for example, may be a great business idea in a poor community that is frequented by tourists. However, you can not have 30, or even 5, collective owners of a store. Or at least, not easily. How many businesses in the U.S. do you know that run this way? Use co-ops when appropriate. To the contrary of the example above, supplying mangoes may be a viable business idea where a number of people can participate and where a co-op might be helpful. If a buyer is identified, the entire community can contribute to picking and supplying mangoes and use the cooperative as a means to negotiate a better price. Watch out for apathy. Almost anyone will take something for free. If you sense that people are not really interested in the project or in working to make it successful, it may be because it is really of no value to them. In these cases, they may not reject the project because, after all, it is free. This is another good reason for making sure that people invest in the projects that benefit them.